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Former Peninsula Airport Commission Executive Director Sentenced

On July 15, 2020, the U.S. District Court for the Eastern District of Virginia sentenced Kenneth Spirito to 30 months of home detention, 4 years of probation, a $2200 special assessment and $2,511,153 of restitution. On March 10, 2020, a jury found Spirito guilty of 23 counts, including misapplication of property from an organization receiving Federal funds, engaging in monetary transactions in property derived from specified unlawful activity, falsification of records in Federal investigations, conversion of property from an organization receiving Federal funds, perjury, and obstruction of justice.
According to Court records and evidence presented at trial, Spirito led an effort for a start-up airline, People Express Airlines, Inc. (PEX), to obtain a $5 million loan from TowneBank that was guaranteed by the Peninsula Airport Commission. He intentionally misapplied State and federally regulated funds as the cash collateral for the TowneBank loan. Spirito also provided false information to FAA regarding the source of the loan payments.
DOT-OIG conducted this investigation with the Internal Revenue Service-Criminal Investigation Division and the Virginia State Police.